In its recent report, the Bundesbank considers that no additional measures for the relief of Greece’s debt are necessary in the short-term, as Greece has way over exceeded the primary surplus targets. It estimates that surpluses of 3.1% of GDP should be considered feasible also in the long-term, and warns that an extensive protection against market actions could reduce the dynamic of the reforms.

The report also stresses that after the end of the program, in August 2018, Greece will again depend on the financing of the markets, which means that private creditors must be convinced of Greece’s solvency. Therefore, the Bundesbank considers an extra protection to be necessary for some time after the end of the program. However, the Greek government is seemingly trying to create a security reserve with resources from the current program, the report reads.

 

Translation: Eleni Gogou